Disaster money may finally be on its way

The check is in the mail. Well, maybe. For those farmers awaiting government disaster assistance for their 2000 crop, earlier reports that the check was in the mail may have been greatly exaggerated.

Now, at least for those growers who sustained disaster related yield losses, the money may finally be on its way. For those farmers who have claims pending for quality losses, however, the wait for relief will be longer.

Hunt Shipman, temporarily on assignment from Sen. Thad Cochran to USDA and currently serving as undersecretary of agriculture for domestic policy, says, USDA delivered the disaster regulations for quantity losses to the Federal Register in March where they were put on public display awaiting publication. This move authorizes USDA to begin issuing checks to farmers.

“The program software has been delivered out to the states, and we should have checks going out from local Farm Service Agency offices shortly,” he says. “Generically, there are states that should be issuing checks beginning March 16 to those growers who applied, and have successfully met the qualifications, for a disaster related yield loss payment.”

Shortly before the program regulations received a stamp of approval from the Department of Agriculture and the Office of Management and Budget, Gary Morrison, agricultural programs specialist at the Farm Service Agency's state office in Jackson, Miss., assured producers that his office was ready to begin paying farmers' claims.

“As soon as the program regulations are approved by the Office of Management and Budget and the Department of Agriculture, we will begin making payments to farmers. There will not be a 30 day wait,” he says.

“County offices are in the process now of getting the information in from farmers and are holding county committee meetings to approve those applications. Once the regulations are in, payments to farmers should begin immediately,” Morrison says. “We're through training our employees, our computer software is installed to input applications, and we have payment software that will be opened up as soon as the program regulations are published.”

“This is the third year in a row that we've done this program,” Morrison says, “so there shouldn't be any confusion among producers with how the program operates, or which losses are eligible for the disaster program. Most of the confusion among farmers has been about when they are going to get their money.”

Many producers were under the impression that they would receive a check immediately after meeting the necessary qualifications and signing up for the program at their local Farm Service Agency office. And, although the words, “immediate pay,” have been tossed around in many discussions about the disaster appropriations, the phrase apparently has a slightly different meaning in government circles.

According to Craig Brown, National Cotton Council's vice president for producer affairs, what the government was really saying was that disaster claims would not be pro-rated. That means farmers applying for crop losses based only on a reduction in yield will know exactly how much disaster relief they are eligible to receive after signing up for the program at their local Farm Service Agency office. The phrase, “immediate pay,” did not mean farmers would be paid immediately after qualifying for program funds.

In past disaster relief legislation, Congress provided a set dollar amount to cover the cost of farmers' loss claims. That meant all potential claims had to be received by the Farm Service Agency and then pro-rated to stay within the budgeted figure before any payments could be made to farmers.

In the 2000 disaster legislation, however, instead of providing a set allocation, Congress allowed for “whatever payments may be necessary.” This language change allows growers, on the same day they sign up for the program, to know exactly how much money they will receive.

For example, if you are a cotton farmer who experienced a yield reduction in 2000, you're going to apply for losses the same way you have the past two years, and will receive payment as soon as the regulations are approved. The big difference, this year, is that you don't have to wait to know what pro-rated amount you are going to receive. You will receive a check for the amount listed on the worksheet you received at your local FSA office.

Also this year, the program regulations for quantity losses have been approved as “interim final rules.” This allows the Farm Service Agency to make payments to farmers during the “comment period,” instead of delaying payments until after what is usually at least a 30 day period following approval by the Office of Management and Budget.

Quality loss payments still on hold

Despite the good news for some farmers, Growers with crop quality losses due to disastrous growing conditions in 2000 will have to continue waiting for governmental relief.

Fueling the delay is the fact that the folks at USDA are writing not one set of regulations, but two. They are also faced with simultaneously writing an instruction manual for Farm Service Agency personnel to begin implementing a quality loss program that previously has not existed.

As one Washington source puts it, “Because farmers are in such serious financial distress, USDA, to their credit, is trying to do this as quickly as possible. But the truth is the Farm Service Agency is struggling with a pretty complicated rule. I don't think anybody knows when USDA is going to get this done.”

Officially known as the “Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act of 2001,” the disaster program legislation allows farmers to receive aid for both quantity and quality crop losses.

The quality loss aspect of the law is new. In the past, quality losses have simply been translated into yield losses and farmers were paid on the resulting quantity loss. Now, quality losses must be measured and each loss must be translated into a monetary value.

In the Mid-South and areas of the Southwest, much of the publicity about this program has centered on cotton quality losses, including high micronaire and short staple length measurements. However, quality loss regulations must be written to cover every crop included in the USDA program, which amounts to well over 100 different crops.

“As long as the affected production meets the quality loss thresholds, it is eligible. That's true for all crops, including soybeans, rice, corn, pecans, apples, broccoli and asparagus,” says Shipman.

“Congress wrote the statute on quality losses differently than it has in past disaster programs. As such, we could not emulate prior programs to deliver the regulations more quickly. As a result, we have the unenviable task of having to create a program that meets everybody's needs without writing specific rules for every crop that is out there,” he says.

“We are working as quickly as possible to complete the regulations for quality losses,” Shipman says. “It's among our top priorities.”

“We have some producers whose yields were not significantly affected this year, but the quality of the crop they produced was significantly affected. These producers are still hurting regardless of what type of loss they experiences. So, saying we are helping the majority of folks with one assistance package versus the other, I don't think is necessarily fair.”

Once the quality loss regulations are written and approved by USDA and the Office of Management and Budget, farmers will be able to receive assistance at, or soon after, meeting program qualifications.

In the meantime, producers with disaster-related yield losses can complete the necessary paperwork at their local FSA office to receive payment for the losses. Then, after the quality loss regulations are written and approved, those farmers who qualify for quality loss assistance may have their claims amended to receive the higher of the two payments.